GE boosts profit outlook, but stock falls as booming order growth cools

By Tomi Kilgore

Revenue growth guidance for 2026 was also raised, but it implied a slowdown in the second half of the year

GE Aerospace's stock falls after earnings, again, despite and profit beat and raised outlook.

Shares of GE Aerospace fell Thursday, after the jet-engine maker and defense contractor raised its full-year profit outlook but showed the rapid order growth it recently experienced was slowing down.

The raised outlook marked a change for the company, as GE was reluctant to do so three months ago despite a big earnings beat because of uncertainties over fuel prices, and how that would affect air-travel demand amid the Iran conflict.

"Given our exceptional year-to-date performance and visibility for the remainder of the year, we are raising our full-year guidance across the board," CEO Larry Culp said.

While the outlook improved, the revenue growth guidance for the year was less than that of the previous two quarters, implying the growth slowdown will continue. But as Vertical Research Partners analyst Robert Stallard put it, that's not necessarily something investors should be too concerned about.

"While the 2026 guidance points to a slowdown in the second half, we suspect that there is some conservatism built into this forecast," Stallard wrote in a note to clients.

Still, the stock (GE) declined 4% on Thursday, and was 8.9% below its July 6 record close of $378.68. The selloff shouldn't be much of a surprise to investors, as the stock sank 5.6% on the day the previous earnings report was released, and dropped 7.4% after the one before that, even though profit and revenue beat expectations each time.

For the second quarter ending June 30, net income rose 17.2% from a year before to $2.8 billion, while adjusted earnings per share increased to $2.02 from $1.66 and topped the average analyst estimate compiled by FactSet of $1.86.

Revenue excluding nonrecurring items grew 24.5% to $12.63 billion, to beat the FactSet consensus of $11.87 billion, as total orders rose 17% to $16.5 billion. In April the company had reported order growth of 87%, accelerating from 74% growth reported in January. And adjusted revenue rose 29% in the first quarter.

But for 2026, the company raised its growth outlook for adjusted revenue to a "high-teens" percentage range - below the growth rates seen during the first half - from a percentage in the low double digits.

GE also boosted its adjusted EPS guidance to a range of $7.65 to $7.85 from $7.10 to $7.40.

Among GE's business segments, commercial engines and services revenue rose 27.3% to $9.73 billion, as equipment revenue climbed 30% and both spare parts and shop-visit revenue rose 25%. Orders increased 17.7% to $12.93 billion.

Defense and propulsion-technologies revenue was up 15.6% to $3.44 billion, while orders rose 12.5% to $4.14 billion.

Free cash flow jumped 42.8% to $3.03 billion, well above the FactSet consensus of $1.81 billion. And full-year guidance for free cash flow was raised to a range of $8.9 billion to $9.2 billion from a prior range of $8 billion to $8.4 billion.

GE's stock has been on a roll, as it had rocketed 491% in three years through 2025, and it has gained 12% this year through Wednesday. In comparison, the S&P 500 index SPX has advanced 10.2% this year, after rising 78% over the previous three-year period.

-Tomi Kilgore

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07-16-26 1912ET